By: Mariaan Webb
20th April 2006
The merger between the two chrome mining companies was approved unconditionally and would enable IMR to acquire 32,5% of the issued shares of Kermas South Africa, a subsidiary of the Kermas group.
The group, which is incorporated under the laws of the British Virgin Islands, last year bought the Samancor Chrome division from BHP Billition and Anglo American. It incorporated Samancor Chrome under the auspices of the locally-listed Kermas South Africa.
Speaking on behalf of Kermas South Africa, former Samancor Chrome CEO Jurgen Schalamon told the tribunal that the merger between the ferrochrome producers would enable Kermas South Africa to increase its capacity locally, as it would enable the group to undertake more projects in South Africa.
An exchange of technology could also improve efficiencies and the merger would not imply the reduction of any personnel.
Columbus Stainless Steel purchasing manager Theresa Meyer told the tribunal that the merger would not impact negatively on Columbus and the long-term ferrochrome supply contract it had with Samancor Chrome. However, this contract would expire next year.
Both Meyer, and ferrochrome producer Hernic Ferrochrome CEO Colin Bain, who was in the witness stand, reasoned that the proposed merger would not affect prices negatively in the industry and would not push up prices.
Kermas South Africa last week announced the conclusion of a black economic-empowerment (BEE) transaction with the Batho Barena Consortium, led by Ehlobo holdings.
When asked what the effect of the merger would be on the empowerment partner, Kermas’s lawyer Ilse Gaighter commented that “it was still to be agreed upon”.
Kermas South Africa also said, last week, that the BEE transaction would involve Samancor Chrome being rebranded to Samancor-Batho and Kermas South Africa would become Kermas-Ehlobo.
Edited by: Mariaan Webb